LONDON — European stocks advanced on Tuesday as global markets looked to rebound from a broad sell-off in recent days, prompted mainly by concerns over inflation and rising interest rates — and the potential for a global recession.
The pan-European Stoxx 600 added 0.9% in early trade, with construction and material stocks climbing 2.3% to lead gains as most sectors and major bourses entered positive territory. Health care stocks dropped 0.5%.
The positive trade in Europe comes after regional markets fell to two-month lows on Monday as global investors fled risk assets en masse owing to fears over inflation.
The sell-off was not confined to Europe, with U.S. stocks also falling sharply, pushing the S&P 500 to breach the 4,000 level for the first time in more than a year.
Monday’s moves came as Wall Street experienced an erratic last week, with eye-popping day-to-day swings as investors weighed the prospects of rising interest rates against the potential of slower economic growth.
Earnings in Europe on Tuesday came from Bayer, Munich Re, Pirelli and Salvatore Ferragamo.
In terms of individual share price movement, Swedish Match surged 24% to a record high after the nicotine products company confirmed on Monday that it had received a takeover approach from tobacco giant Philip Morris.
On the data front, Germany’s ZEW institute is set to publish its economic sentiment index for May.